Rational instability in the natural coalition forming

The work aims to investigate a paradigm of instability in coalition forming among countries, using a model inspired from Statistical Physics. The instability is a consequence of decentralized maximization of the individual benefits where contradictory associations into coalitions occur due to independent evolution of pairwise propensity bonds. In contrast to the existing literature we analyze the phenomena within a long horizon rationality of actors. This allows to explore the complex behaviors and phenomena such as instability, infinite cycling and non-optimal stability. Along with the formal implementation, we illustrate the phenomena in a multi-thread simulation created for this aim, and provide analysis of several real cases including the Eurozone.